All Forum Posts by: John G.

This is a ? that we have not really asked ourselves until now.  Until now with 22 units its been finding great deals with awesome cash flow.

Lately I have been listening to a lot of BP podcasts and it has me changing my mind.  Its just hard to wrap ones mind around making less cash flow when that has been the strategy that got me to 22 units.  (A lot of the properties are C)

We have 2 different properties that we can buy.  The quality of house is about the same...needs some work.  But one is in C- neighborhood and makes decent 2-300 cash flow more than the B+ neighborhood home...same purchase price.

Does anyone have any guidance as to the risk rewards of either direction?

Yes I would concur....SELL!

@Jordan Leithart with that being said it may be possible talking to the right people and asking the right questions you might be able to get duplex status back. But you would want to buy cheap enough just in case your not successful. You can mitigate some of that risk by doing your do diligence now. Talk to local planning and zoning department and rental registrAtion office as a starting place.

@Michael Wlosek if they have a history in your current property paying rent on time I would leave them alone. I was in the same boat as you. I fixed up units and raised rents. The bad ones just left and the others stayed and kept paying the raised rent rates on time...and have been there for 8 years. They do not meet 3x income standard but still pay the rent on time. I’m glad I never messed with them. I did walk them through the improvements I was doing and had done. IE. added laundry in basement, fixed deferred maintenance items, landscaping, exterior paint, etc. I showed them reasons for raised rents...they were happy to pay. Doesn’t always go that way.

@David Keene I own one. Great cash flow! Might not gain equity as fast as a normal home but who cares if it’s a cash cow. As long as it rents easy go for it. Everyone has their own strategy.

@Justin Worsham how much r u netting a month. Rather than selling I would cash out refinance and use the 70% LTV for down money on 2-3 more rental buy and holds. It all depends on your strategy and what your goals are.

@Jordan Leithart the property could have been re-zoned years ago to single family and had been grandfathered in. Then the current owner may have let the rental registration lapse thus allowing the “grand fathered” status to fall off. Now it can only be a single family home. That’s a scenario that happens around me in northern Mn. Does that make sense?

@Sam T. I feel there is no limit. If you can keep finding cash flowing deals in one area go for it. I would make sure of course that it is a city that’s flourishing.

I'm just trying to get an idea of what everyone likes to have for cash reserves for cap ex, maint., etc.  I am up to 22 units which all of a sudden there I am.  Its easy to lose track of how much one SHOULD have in the bank because its hard to leave money sitting and not working for you.

I understand there are many variables such as age of house, age of roof, age of furnace, etc.  But, I'm just curious what everyone else likes to have sitting there waiting per unit or per house.

@Colby Mulry This may not be the way to deal with it BUT, I had one tenant that was the same way.  Always excuses, I hit them with the late fees, which is another thing to actually get from them.   My solution was Ended up moving the "1st" of the month pay date date to the 15th.  They paid on time the 15th every month.  So it worked out.  But I went from wanting and threatening to evict them to them paying rent on the 15th every month and keeping them as a tenant.  They take care of the house, mow, and fix things for free.  This just worked for that particular tenant.  I have plenty of eviction stories too....if it ends up down that road, its very intimidating but once you do it yourself...you realize its not hard AT ALL.

Good Luck